2025 has seen a number of clients contact me about the desire to reduce taxes. One option I tell them to consider is a Charitable Remainder Trusts (CRTs). CRTs are becoming an increasingly popular estate planning tool in 2025. They allow individuals to support charitable causes, reduce taxes, and provide income for loved ones—all within one flexible, IRS-recognized trust structure. With potential upcoming tax law changes and more people focusing on legacy planning, CRTs are emerging as a go-to strategy for individuals holding appreciated assets like real estate, stocks, or cryptocurrency.
What Is a Charitable Remainder Trust?
A Charitable Remainder Trust is an irrevocable trust designed to provide income to beneficiaries for a period of time—either for life or up to 20 years—and then distribute the remaining assets to one or more charitable organizations. This strategy helps donors convert appreciated assets into income, defer capital gains taxes, and support the causes they care about. By removing these assets from their estate, donors may also reduce future estate tax liability.
How a CRT Works: Step-by-Step
A CRT begins when a donor transfers assets such as appreciated securities, income-producing real estate, or cash into the trust. Once the CRT is funded, the donor receives an immediate charitable income tax deduction based on the estimated value of the remainder gift to charity. During the trust term, income is distributed to the named beneficiaries. This could be the donor, a spouse, or other family members. At the end of the term, any remaining trust assets are transferred to the chosen nonprofit organizations. There are two main types of CRTs. A Charitable Remainder Annuity Trust (CRAT) pays a fixed dollar amount annually. A Charitable Remainder Unitrust (CRUT) pays a fixed percentage of the trust’s annual value, which adjusts over time with market performance.
Benefits of Charitable Remainder Trusts in 2025
The primary benefit of a CRT is its ability to reduce capital gains tax liability when appreciated assets are sold. Because the CRT is a tax-exempt entity, it can sell assets without paying capital gains tax. This means more money stays in the trust, available for income generation and charitable purposes. In addition to tax savings, CRTs create a predictable income stream for beneficiaries. For many, this helps supplement retirement income or support family members over time. The charitable remainder ensures your values live on, even after the trust ends. Another key advantage is portfolio diversification. A donor can use a CRT to convert a concentrated position—such as a single stock or piece of real estate—into a well-balanced investment portfolio without triggering immediate taxes.
Why Charitable Remainder Trusts Are Trending in 2025
Several trends are driving renewed interest in CRTs this year. First, a potential reduction in estate and gift tax exemptions means high-net-worth individuals are seeking ways to reduce taxable estates. At the same time, capital gains tax rates might increase, creating urgency for more tax-efficient strategies. Second, the integration of digital assets like cryptocurrency and NFTs into CRTs is gaining momentum. More charitable organizations now accept digital assets as remainder gifts, opening the door for crypto investors to leverage CRTs in their estate planning. Finally, in a year marked by economic uncertainty, CRTs provide stability. They deliver consistent income to beneficiaries while preserving the donor’s philanthropic vision.
How to Set Up a Charitable Remainder Trust
Creating a CRT requires a careful assessment of your goals, assets, and intended beneficiaries. You’ll need to decide whether a CRAT or CRUT suits your income needs. Beneficiaries can include yourself, a spouse, children, or anyone else you wish to support. Next, select the charitable organization or organizations that will receive the remainder interest. This could be a hospital, university, religious institution, or public charity that aligns with your mission. Asset selection is also key. Ideal CRT funding assets include appreciated stocks, business interests, real estate, or cryptocurrency. Each asset type has unique implications for liquidity, valuation, and income generation. To ensure legal compliance and tax efficiency, it’s important to work with a qualified estate planning attorney and a financial advisor familiar with charitable trusts.
Misconceptions About CRTs
Some people assume CRTs are only for ultra-wealthy individuals. In reality, CRTs can benefit anyone with appreciated assets and a desire to support charitable causes. Others mistakenly believe they’ll lose all control over assets placed into a CRT. While the trust is irrevocable, donors can retain control over investment decisions and trustee selection. Another common misconception is that CRTs are too complex. In truth, the setup process is relatively straightforward when handled by professionals, and the long-term benefits often outweigh the upfront effort.
Is a CRT Right for You?
If you’re holding appreciated assets and want to reduce your tax exposure while leaving a legacy that reflects your values, a Charitable Remainder Trust may be the right solution. At our firm, we help clients design CRTs that align with both financial goals and philanthropic intent. Whether you’re planning for retirement, reducing estate taxes, or preparing to donate cryptocurrency, a CRT offers a powerful way to achieve more with your wealth. Contact us today to explore how a Charitable Remainder Trust can become part of your long-term estate plan.